Reliance Jio Claims to Have Higher ARPU in the Smartphone Segment

Reliance Jio Claims to Have Higher ARPU in the Smartphone Segment
Reliance Jio, which claims to be the world’s largest data company, has higher ARPUs in the smartphone segment while its tariffs tend to be 7–10 percent lower compared to the competition, i.e., the number two player [Airtel], according to the company’s senior executive, who urges a like-to-like comparison in an interaction with an analyst during the recent earnings call.

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ARPU Comparison Methodology

On the ARPU differential, Jio argues that the comparison is misleading due to differences in calculation methodologies. Specifically, Jio uses the TRAI-reported overall subscriber base as the denominator, which includes a wider set of users.

Jio Explains the Denominator Discrepancy

“I think I would urge all of you to look at the way ARPUs are getting computed. So this 15 percent ARPU gap, when you say, if you just break that up into the reporting basis, so look at the denominator in our case, which is the overall subscriber base, the TRAI reported subscriber base and look at the denominator in the case of the nearest rival, which is not that base, which is a different base. So you are no longer comparing like to like,” said Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited.

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Analyst Questions Jio’s ARPU Gap Despite Tariff Hike

Thakur was responding to an analyst’s question: “Jio led the tariff hike. And despite this quarter’s ARPU actually coming ahead of expectation, why do you think the ARPU is still 15 percent lower than the number two operator?”